Your Cooperative

Capital Credits

Your co-op membership is an investment in the organization, and you build equity each year you receive service. Capital Credits are your return on that investment. Learn more about how it works and contact us if you have questions.

Capital Credits

A Powerful Return on Your Investment

Each month when you pay your electric bill, it isn't just payment for service, but an investment in a company you own. One of the many benefits of being a member/owner of Farmers is receiving a Capital Credit check as a return on your investment, much like a dividend on stocks. As a member you build equity in the cooperative each year you receive service.

Member equity is the essential tool Farmers uses to build, maintain, and upgrade the facilities necessary to provide you the reliable, low-cost electric service you have become accustomed to receiving. Retirement of Capital Credits is a return of member-furnished capital. Farmers is a not-for profit electric cooperative, so any money left over after paying for all operating costs for the fiscal year is returned to our members. In 2008, almost 40,000 Farmers members past and present received Capital Credit checks.

"On behalf of the Farmers Electric Cooperative board of directors, it's a privilege for Farmers to issue Capital Credit checks," said Mark Stubbs, General Manager. "It clearly demonstrates our commitment to our members."

What are the steps to receiving a capital credit refund?

Step 1: When you sign up for electric service with Farmers and pay your membership fee, you become a member/owner of the cooperative. As you purchase electricity from the cooperative, you build equity in it.

Step 2: Each year, Farmers designates a portion of what you pay in purchases to your Capital Credits account. This is called an allocation. The amount of the allocation is determined by using a multiplying factor that is common to all members. This ensures each member’s allocation is a fair and equitable percentage.

Step 3: Capital Credits are retired at the discretion of the Board of Directors, and as the financial conditions of the cooperative allow. Capital Credits are your investment in Farmers and our goal is to return them to you on a reasonable and systematic basis. When the board of directors determines the cooperative has met its financial requirements, they may decide to “retire” (pay) the Capital Credits to our members.

Note: If you move, make sure to give your new address to Farmers so we can continue to refund any monies you are eligible to receive.

Non-taxable Income: Capital credits are a return of money paid for electricity in a previous year and are generally not taxable income for residential consumers. Commercial and industrial consumers should discuss any capital credits retirements with their tax advisers.

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